By Adam DuBard, Political Analyst
In early January, Republican House Minority Leader Kevin McCarthy (R-CA) created a stir on Capitol Hill by announcing he was considering banning members of Congress from trading stocks, should Republicans win back the House in the 2022 midterms. Although previously regarded as somewhat of a left-wing priority, McCarthy’s announcement was a significant step for the anti-corruption movement, especially as Republicans are currently viewed as the favorites to win the 2022 midterms.
In March of 2020, the conflict of interest issues with members of Congress received a massive jolt of publicity, as four senators were accused of trading millions of dollars in stocks shortly after a closed-door briefing for U.S. senators on the threats posed by COVID-19. Senators Kelly Loeffler (R-GA), Richard Burr, (R-NC), Jim Infhofe (R-OK), and Dianne Feinstein (D-CA), all faced massive amounts of criticism and calls to resign after this disclosure, although none were criminally prosecuted. Loeffler ended up losing her re-election bid in early 2021, while Burr retired prior to the 2020 election.
Although these senators were never criminally prosecuted, this instance underscores the countless problems with allowing members of Congress to buy and sell stocks while in office. Members of Congress are privy to massive amounts of information that the general public simply has no access to. Even more problematic is that these same politicians are responsible for crafting legislation that regulates, or deregulates, American corporations.
Further complicating matters is that while some members of Congress can publicly claim to not own any stock, their spouses hold massive amounts of stocks. House Speaker Nancy Pelosi (D-CA), for example, personally does not own any stock, yet her husband owns millions of dollars in stocks of companies such as Alphabet, Apple, Microsoft, and Amazon. Notably, several of these companies have come under intense scrutiny in recent years over their lack of regulation, as well as how much they actually pay in federal taxes.
Although Speaker Pelosi maintains that she does not personally own any stock, she has opposed any recent efforts at banning members of Congress from trading stocks. In December 2021 she defended her position by stating “We’re a free market economy,” completely ignoring the clear conflict of interest in allowing the same politicians who decide the laws and regulations governing the American economy to participate in stock trading. However, after the recent weeks of pressure both from the public and her fellow members of Congress, Representative Pelosi announced that she would support measures banning members of Congress from trading stocks, saying “If members want to do that, I’m OK with that.”
Several members of the Democratic Party have reacted to Kevin McCarthy’s intentions to ban stock trades, both in the House and Senate. Senators Jon Ossof (D-GA) and Mark Kelly (D-AZ) introduced legislation the same week Representative McCarthy raised the issue, while a bipartisan group led by Abigail Spanberger (D-VA) reintroduced the Transparent Representation Upholding Service and Trust (TRUST) in Congress Act on January 21st. The TRUST Act would require “Members of Congress — as well as their spouses and dependent children — to put certain investment assets into a qualified blind trust during their entire tenure in Congress.”
These are all positive developments in fighting corruption in American politics. And as Business Insider illustrated in their report earlier this month, these regulations on politicians owning stock are sorely needed. According to Business Insider’s reporting, 54 members of Congress violated already-existing conflict of interest laws in 2021 alone. Perhaps more importantly, measures to limit stock trades in Congress are incredibly popular. In fact, according to some polls more than three-fourths of voters would support such a measure, which is rare in an era of polarized voters.
Banning stock trades by members of Congress is a no-brainer for those seeking to increase transparency and trust in the American government. These regulations not only hold broad public support, but they also would address serious issues in conflict of interest matters on Capitol Hill. Recently, debates over antitrust issues and regulatory reforms for major tech companies have grown louder in Congress, while the question of how to reduce emissions to combat climate change remains an urgent one for America’s leaders. As long as American policymakers are allowed to buy and sell stocks, they will continue to have vested financial interests in these crucial decisions, which severely undermines the American government’s effectiveness, and the public’s trust in government. Ending this clear conflict of interest is crucial to ensuring that these policy decisions represent the American people, rather than our politicians’ bottom lines.